It's not uncommon for movies to drop out of circulation and simply disappear, as fans of Deep End will attest. Barely seen since its release in 1971, the film concerns Mike (played by John Moulder-Brown), a floppy-fringed 15-year-old who becomes dangerously infatuated with Susan (Jane Asher), his co-worker at the public baths. What's unusual about this prolonged absence is that it should have befallen a film so passionately admired. The influential critic Andrew Sarris thought it measured up to the best of Godard, Truffaut and Polanski. The New Yorker's Penelope Gilliatt called it "a work of peculiar, cock-a-hoop gifts". If something as venerated as Deep End can sink, what hope for the rest of cinema?

After years of being mired in rights issues, this vivid, rapturous film is about to return in a restored print. It's appropriate that such an elusive picture should transpire to not be quite what it seems. What could have been just another coming-of-age story is transformed by an absurdist sensibility, uninhibited performances and a heightened use of colour. Although considered a defining British work, as well as one of the most acute screen portraits of London, Deep End is actually a US/German co-production, written and directed by a Pole (Jerzy Skolimowski, best known then for co-scripting Polanski's Knife in the Water), and shot largely in Munich.

There are glimpses of the capital – the exterior of the public baths was in Leytonstone, London, while Soho is the setting for a dreamlike sequence in which Mike visits the boudoir of a prostitute whose leg is in a cast, before purchasing an excessive quantity of hot dogs from Burt Kwouk (Kato from the Pink Panther films).

Jane Asher remembers receiving the script. "It was a bit of a mess," she says. "Jerzy's English wasn't great at the time. I remember sitting up late every night rewriting my dialogue. But Susan was terrific to play. She's at that stage where she's completely aware of her sexual power and uses it ruthlessly. Now that I've got two sons of my own, I feel more protective of Mike, more so than back then, when perhaps I was a bit more like her myself."

Skolimowski maintains that he cast John Moulder-Brown as soon as the 16-year-old walked into his office. ("His charm and innocence were obvious.") The actor has a different recollection. "I was trying to be very sophisticated, smoking cigarettes and being cool," he says now. "I must have looked ridiculous. Jerzy thought I wasn't vulnerable enough, but the producer Judd Bernard persuaded him to give me a screen test, and that convinced him. I was going through the same adolescent period as Mike. Unlike him, I was lucky enough to have had girlfriends, but I still had that rawness. For me it became all about allowing emotions I understood as a teenager to have a life within the context of the scenes."

Despite his youth, Moulder-Brown was undaunted about working so intimately with Asher. "She had broken up with [her fiance] Paul McCartney by then, so there may have been some sensitivity about that – you know, better not start humming any Beatles tunes. But she didn't arrive as a celebrity, just a member of the team." The two actors' easygoing rapport is one of the film's joys, and a consequence of the playful atmosphere fostered by Skolimowski. "Jerzy is very charming," says Asher. "He's not one of those directors who use fear, but you still felt a core of steel. He knew what he wanted."

The cast were free to improvise, and were instructed to remain in character even if a take went awry. "There's a bit where I'm on my bicycle, riding alongside Jane's car," says Moulder-Brown. "I was supposed to stop the bike in front of the vehicle, but it was raining and the brakes didn't work, so the bike skidded, hit the pavement and I went flying. As I was in the air, I remember thinking, 'We've got to keep going because this is going to look great.' When I landed, I could just hear Jerzy calling out: 'Kip feelming! Kip feelming!'"

While the spine of the picture is Mike's growing obsession with Susan, there are priceless incidental pleasures along the way, notably a cameo by Diana Dors as one of the boy's more demanding clients. This blonde typhoon in polka dots makes the bewildered hero an accessory to orgasm, clutching him to her bosom as she conducts aloud a George Best fantasy ("Tackle, dribble, dribble, score!").

"What a lady!" Skolimowski exclaims. "Casting her was such an event. When she put on the ridiculous costume we had prepared, she looked at herself in the mirror and said, 'So. This is how you see me?' I said, 'You look fantastic!'"

"Jerzy would seduce people into doing whatever he wanted them to do," says Moulder-Brown. "In that scene with Di, she really bared her soul: this glamorous star suddenly allowed herself to be that vamping caricature."

Skolimowski's powers of persuasion extended beyond the cast. He had his friend Cat Stevens write But I Might Die Tonight, the movie's opening song. Markedly different was Mother Sky, a grinding 14-minute number by Can that plays during the Soho sequence. The two songs represent opposing impulses in both Mike and the film: the Cat Stevens is tender and hopeful, while the Can is "a bit of a downer", Skolimowski says.

From conception to completion, Deep End took scarcely more than six months. The consensus when it premiered at the Venice film festival in September 1970 was that it would have been a dead cert for the Golden Lion, if only the prize-giving hadn't been suspended the previous year. "The organisers had decided it should all be democratic," grumbles Skolimowski. "Every film equal, or some idiotic idea."

Early indications that the picture's downbeat ending might prove problematic for audiences were felt at the San Francisco film festival. "I was supposed to do a Q&A afterwards," the director says. "The organisers brought me to the cinema, they were so happy – 'Oh, the whole room is laughing and enjoying the film.' Then in the last five minutes the room fell silent. When it finished, there was no applause. They said to me, 'Let's forget the Q&A and go for dinner.' During the meal, some audience members came over and said, 'Look, you had such a fantastic film, 90 minutes of enjoyment and humour. Why did you ruin it with the last five minutes?' I told them, 'You know what? I made the film for those last five minutes.'"

Deep End never matched its critical success at the box office, and was soon relegated to the bottom half of a doomed-love double-bill with Zeffirelli's Romeo and Juliet. "It still seems very fresh to me," says Skolimowksi. "That surprised me. It hasn't aged." Moulder-Brown hasn't seen the film for 40 years. "I don't like watching myself. But I liked Deep End. It had charm. Whenever I went for auditions after that, it was always the one everyone mentioned." Asher believes the film's idiosyncrasies have helped insulate it from the ravages of time. "I don't think it's dated at all. But then it didn't fit its time even when it first came out. It always was an odd one."